How Can I Find the Best Price on Car Insurance?

To find the best price on car insurance, first decide how much coverage you need. You’ll want to compare car insurance quotes among companies for the same level of coverage each time. Here are ways to find the best car insurance.

1. Shop around

If you don’t comparison shop, you won’t know if your auto insurance quotes are on the low or high end. Getting quotes from multiple insurers will help you find the cheapest car insurance company.

For instance, in California, rates for a good driver range from $1,470 a year (Wawanesa) to $4,979 a year (PURE)—a range of over $3,500 for the exact same driver.

You can get car insurance quotes online or by working with an auto insurance agent. Independent insurance agents are helpful because they can provide quotes from multiple companies. Insurance quotes are always free.

2. Ask about discounts

Car insurance discounts are a great way to help you get the best price for car insurance. When applying for a policy, many discounts are automatically captured, but it never hurts to look around for more when you’re getting quotes or making changes to your policy.

You may be able to reduce your car insurance costs with discounts by:

• Being a safe driver. Having a driving record free of tickets or accidents can qualify you for a good driver discount, which is typically 10% to 40%.
• Shopping in advance. Getting quotes before your current policy is expiring can earn you a discount. To get this “advance shopping discount” it’s best to shop seven to 14 days in advance.
• Paying in full. Pay your car insurance bill upfront instead of paying monthly to save money.
  Going paperless. Choosing to go paperless with your bills and policy documents may get you a small discount. Typically the discount is under 5% but is easy to obtain.
• Bundling your policies. By bundling home and auto policies, meaning buying them from the same company, you can reduce your rates. Discounts vary between 6% and 23%, according to our research.
• Insuring multiple vehicles. Having more than one vehicle on the same car insurance policy gets you a multi-car discount.
• Being a member of certain organizations. Ask about a discount based on associations or organizations you’re a member of, such as college alumni associations or a union.
• Taking a defensive driving class. If you’re 55 or older, you may earn a discount—typically between 5% to 10%—for sharpening your skills with an approved driving course. Make sure the specific course is approved by your insurer for a discount before you take it.

If you have a teen or young adult on your policy, ask about:

• A good student discount if your child does well in school (high school or college).
• A break in rates for a “student away at school” if they’re going to college at least 100 miles away from home and are without a car.
• Receiving a discount if your young driver completes an approved driver training program.

Asking for discounts is the most popular action taken to reduce car insurance costs, according to a Forbes Advisor survey. Nearly half (47%) of car owners have used this tactic. Switching car insurance companies is the second favorite way to cut costs: 25% of car owners have changed auto insurance companies to lower their monthly rate.

Paying a bill in full rather than monthly can also earn you a price break: 22% of those surveyed have paid in full to get lower car insurance rates. If you cannot pay upfront, another way to save is to choose a higher Deductible, as 19% of surveyed drivers did. That is up 4 percentage points from last month when only 15% opted for a higher deductible to lower their rates.

3. Choose a higher deductible

A deductible is an amount subtracted from a claims check. A higher deductible usually results in a lower insurance premium.

Collision and comprehensive insurance come with a deductible. These coverage types pay for your car’s repairs after an accident or certain events, such as theft or damage from severe weather like hail.

For example, say your vehicle gets flooded and has $2,000 worth of damage. If your comprehensive insurance deductible is $500, the insurer will deduct that from the settlement amount, and you’d get a $1,500 check to cover repairs. If you had a $1,000 deductible, your insurance check would be for $1,000.

Raising your car insurance deductible may save you between 7% to 28% a year on average, according to Forbes Advisor’s analysis of car insurance costs with varying deductible amounts.

A $500 deductible is the most popular choice, but you can choose a higher deductible amount and lower your car insurance bill. That’s because the insurer pays a little less if you file a claim when you choose a higher deductible. Our analysis finds an average savings of 11% a year on car insurance costs when you increase your deductible from $500 to $1,000.

Average savings for increasing a $500 deductible

It’s worthwhile to ask an auto insurance agent to give you quotes for a range of deductible amounts. The potential savings will tell you if it’s worth changing to raise your deductible.

For example:

• You’d only save $4 a year with USAA by bumping the deductible up from $1,000 to $2,000.
• With Westfield you’d save the same amount, $246 a year, if you raise your deductible to $1,000 or $2,000, making it a wise call to move up to only a $1,000 deductible.
• If you have Allstate, you save over $280 a year if you choose a $2,000 deductible over a $1,000 deductible.

If you decide on a high deductible, try to set aside money for that deductible so you have it available if you need to file a claim later.

4. Look for a pay-per-mile policy if you don’t drive much

If you own a car but are retired, take public transportation to work or generally don’t drive much, check out pay-per-mile auto insurance policies.

Pay-per-mile policies consist of two parts: a monthly base rate (stays the same) and a per-mile rate (varies). Say your pay-per-mile insurance has a base rate of $40 a month and a 5-cent-per-mile rate. If you drive 500 miles in a month, your monthly bill would be $65 ($40 plus 500 miles times $.05).

5. Ask about usage-based car insurance

Usage-based insurance (UBI) is similar to pay-per-mile in that it tracks your mileage but is quite different otherwise.

UBI is also known as telematics. It collects data on your driving using a device installed in your car or a smartphone app and produces a driving score. Usage-based car insurance programs generally track certain factors such as:

• Miles driven
• Time of day
• Your speed
• How quickly you accelerate
• How hard you brake
• How you turn corners (if you have “hard-cornering” habits)

Some programs also track the use of your phone while driving.

Usage-based car insurance programs typically offer an initial discount for signing up and promote a potential ongoing discount based on a good driving score. But most drivers in UBI programs do not save money because their driving scores aren’t high enough. These programs are best suited for excellent drivers.